<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended March 31, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-12537
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FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES VIII
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2192277
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two North Riverside Plaza, Suite 950, Chicago, Illinois 60606-2607
- ------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(312) 207-0020
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(Registrant's telephone number, including area code)
Not applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
DOCUMENTS INCORPORATED BY REFERENCE:
The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the Partnership's Prospectus dated July 28, 1982, included
in the Partnership's Registration Statement on Form S-11, is incorporated herein
by reference in Part I of this report.
<PAGE>
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
March 31,
1996 December 31,
(Unaudited) 1995
- --------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $ 6,086,700 $ 6,086,700
Buildings and improvements 29,536,800 29,524,100
- --------------------------------------------------------------------------
35,623,500 35,610,800
Accumulated depreciation and amortization (11,395,500) (11,217,400)
- --------------------------------------------------------------------------
Total investment properties, net of accumulated
depreciation and amortization 24,228,000 24,393,400
Cash and cash equivalents 8,810,400 9,248,100
Rents receivable 346,200 255,300
Other assets 19,100 13,200
- --------------------------------------------------------------------------
$33,403,700 $33,910,000
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 318,100 $ 572,300
Due to Affiliates 88,500 66,600
Distributions payable 836,100 836,100
Security deposits 55,700 63,200
Other liabilities 32,800 32,800
- --------------------------------------------------------------------------
1,331,200 1,571,000
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Partners' capital:
General Partners
Limited Partners (70,000 Units issued and
outstanding) 32,072,500 32,339,000
- --------------------------------------------------------------------------
32,072,500 32,339,000
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$33,403,700 $33,910,000
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the quarter ended March 31, 1996 (Unaudited)
and the year ended December 31, 1995
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' capital, January 1, 1995 $ 178,000 $39,918,500 $40,096,500
Net income for the year ended
December 31, 1995 167,000 775,700 942,700
Distributions for the year ended
December 31, 1995 (345,000) (8,355,200) (8,700,200)
- ------------------------------------------------------------------------------
Partners' capital, December 31, 1995 0 32,339,000 32,339,000
Net income for the quarter ended March
31, 1996 83,600 486,000 569,600
Distributions for the quarter ended
March 31, 1996 $ (83,600) (752,500) (836,100)
- ------------------------------------------------------------------------------
Partners' capital, March 31, 1996 $ 0 $32,072,500 $32,072,500
- ------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended March 31, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $1,173,100 $1,378,400
Interest on short-term investments 120,500 124,300
Interest on mortgage loan receivable 16,300
- ------------------------------------------------------------------------
1,293,600 1,519,000
- ------------------------------------------------------------------------
Expenses:
Depreciation and amortization 178,100 377,400
Property operating:
Affiliates 73,700 90,100
Nonaffiliates 156,000 178,700
Real estate taxes 139,700 137,500
Insurance--Affiliate 12,200 19,700
Repairs and maintenance 105,100 124,200
General and administrative:
Affiliates 10,300 9,600
Nonaffiliates 48,900 42,900
- ------------------------------------------------------------------------
724,000 980,100
- ------------------------------------------------------------------------
Net income $ 569,600 $ 538,900
- ------------------------------------------------------------------------
Net income allocated to General Partners $ 83,600 $ 88,900
- ------------------------------------------------------------------------
Net income allocated to Limited Partners $ 486,000 $ 450,000
- ------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
(70,000 Units outstanding) $ 6.94 $ 6.43
- ------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1996 1995
- ---------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 569,600 $ 538,900
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 178,100 377,400
Forgiveness of principal on mortgage loan receivable 20,000
Changes in assets and liabilities:
(Increase) in rents receivable (90,900) (73,300)
(Increase) decrease in other assets (5,900) 37,700
(Decrease) increase in accounts payable and accrued
expenses (254,200) 91,800
Increase in due to Affiliates 21,900 50,400
Increase in other liabilities 21,900
- ---------------------------------------------------------------------------------
Net cash provided by operating activities 418,600 1,064,800
- ---------------------------------------------------------------------------------
Cash flows from investing activities:
Payments for capital and tenant improvements (12,700) (10,400)
Proceeds from retirement of mortgage loan receivable 1,044,000
- ---------------------------------------------------------------------------------
Net cash (used for) provided by investing activities (12,700) 1,033,600
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Cash flows from financing activities:
Distributions paid to Partners (836,100) (777,800)
(Decrease) increase in security deposits (7,500) 3,800
- ---------------------------------------------------------------------------------
Net cash (used for) financing activities (843,600) (774,000)
- ---------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (437,700) 1,324,400
Cash and cash equivalents at the beginning of the period 9,248,100 8,356,100
- ---------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period $8,810,400 $9,680,500
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
March 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement filed with the Securities and
Exchange Commission on Form S-11. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is included in the Registration Statement and
incorporated herein by reference.
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles. Under this method of accounting, revenues are
recorded when earned and expenses are recorded when incurred.
Preparation of the Partnership's financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter ended March 31, 1996 are not necessarily indicative of the
operating results for the year ending December 31, 1996.
Commercial rental properties held for investment are recorded at cost, net of
any provisions for value impairment, and depreciated (exclusive of amounts, if
any, allocated to land and value impairments) on the straight-line method over
their estimated useful lives. Upon classifying a commercial rental property as
held for disposition, no depreciation or amortization of such property is
provided in the Financial Statements. Rental guarantees from the sellers of
properties are treated as a reduction of the purchase price of the property for
accounting purposes and are not treated as Cash Flow (as defined in the
Partnership Agreement) for Partnership distribution purposes. Lease acquisition
fees are recorded at cost and amortized over the life of the lease. Repair and
maintenance costs are expensed as incurred; expenditures for improvements are
capitalized and depreciated over the estimated life of the improvements.
During the first quarter of 1996, the Partnership adopted Financial Accounting
Standards Board Statement No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (the "Standard"). The
Standard established guidance for determining if the value of defined assets
are impaired, and if so, how impairment losses should be measured and reported
in the financial statements. The Standard also addressed the accounting for
long-lived assets that are expected to be disposed of. The adoption of the
Standard did not have a material effect on the Partnership's financial
statements.
Cash equivalents are considered all highly liquid investments with an original
maturity of three months or less when purchased.
Certain reclassifications have been made to the previously reported 1995
statements in order to provide comparability with the 1996 statements. These
reclassifications had no effect on net income or Partners' capital.
Reference is made to the Partnership's annual report for the year ended
December 31, 1995 for a description of other accounting policies and additional
details of the Partnership's financial condition, results of operations,
changes in Partners' capital and changes in cash balances for the year then
ended. The details provided in the notes thereto have not changed except as a
result of normal transactions in the interim or as otherwise disclosed herein.
2. RELATED PARTY TRANSACTIONS:
In accordance with the Partnership Agreement, subsequent to December 23, 1982,
the Termination of the Offering, the General Partners are entitled to 10% of
distributable Cash Flow (as defined in the Partnership Agreement), as a
Partnership Management Fee. In addition, Net Profits (exclusive of Net Profits
from the sale or disposition of Partnership properties) are allocated: first,
to the General Partners, in an amount equal to the greater of the General
Partners' Partnership Management Fee for such fiscal year, or 1% of such Net
Profits; and second, the balance, if any, to the Limited Partners. Net Profits
from the sale or disposition of a Partnership property are allocated: first, to
the General Partners and the Limited Partners with negative balances in their
capital accounts, pro rata in proportion to such respective negative balances,
to the extent of the total of such negative balances; second, to the General
Partners, in an amount necessary to make the aggregate amount of their capital
accounts equal to the greater of the Sale or Refinancing Proceeds to be
distributed to the General Partners with respect to the sale or disposition of
such property or 1% of such Net Profits; and third, the balance, if any, to the
Limited Partners. Net Losses (exclusive of Net Losses from the sale,
disposition or provision for value impairment of Partnership properties) are
allocated 1% to the General Partners and 99% to the Limited Partners. Net
Losses from the sale, disposition or provision for value impairment of
Partnership properties are allocated: first, to the extent that the balance in
the General Partners' capital accounts exceeds their Capital Investment or the
balance in the capital accounts of the Limited Partners exceeds the amount of
their Capital Investment (the "Excess Balances"), to the General Partners and
the Limited Partners pro rata in proportion to such Excess Balances until such
Excess Balances are reduced to zero; second, to the General Partners and the
Limited Partners pro rata in proportion to the balances in their respective
capital accounts until the balances in their capital accounts shall be reduced
to zero; third, the balance, if any, 99% to the Limited Partners and 1% to the
General Partners. In all events there shall be allocated to the General
Partners not less than 1% of Net Profits and Net Losses from the sale,
disposition or provision for value impairment of a Partnership property. For
the quarter ended March 31, 1996, the General Partners were entitled to
distributable Cash Flow (as defined in the Partnership Agreement), and
accordingly, allocated Net Profits, of $83,600.
4
<PAGE>
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter ended March 31, 1996 were as follows:
<TABLE>
<CAPTION>
Paid Payable
- ----------------------------------------------------------------------
<S> <C> <C>
Property management and leasing fees $59,800 $32,000
Reimbursement of property insurance premiums, at cost None 12,200
Real estate commissions (a) None 37,700
Reimbursement of expenses, at cost:
--Accounting 11,800 3,800
--Investor communication 2,700 1,200
--Legal 2,300 None
--Mortgage servicing None 1,600
- ----------------------------------------------------------------------
$76,600 $88,500
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</TABLE>
(a) As of March 31, 1996, the Partnership owed $37,700 to the Managing General
Partner for real estate commissions earned in connection with the sale of
five of the warehouses comprising a portion of the Atlanta Gateway Park
Industrial Center. These commissions have been accrued but not paid. In
accordance with the Partnership Agreement, the Partnership will not pay the
General Partners or any Affiliates a real estate commission from the sale
of a Partnership property until Limited Partners have received cumulative
distributions of Sale or Refinancing Proceeds equal to 100% of their
Original Capital Contribution, plus a cumulative return (including all Cash
Flow (as defined in the Partnership Agreement) which has been distributed
to the Limited Partners from the initial date of investment) of 6% simple
interest per annum on their Capital Investment from the initial date of
investment.
Revco D. S., Inc. ("Revco"), a drug store company, of which a 20% ownership
interest was acquired by Zell Chilmark Fund, L.P., an Affiliate of the Managing
General Partner, on September 1, 1992, is obligated to the Partnership under a
lease for store space at Walker Springs Plaza Shopping Center. During the
quarter ended March 31, 1996, Revco paid rent of $10,300. The per square foot
rent paid by Revco is comparable to that paid by other tenants at this
property.
On-site property management for the Partnership's properties is provided by
Affiliates of the Managing General Partner for fees ranging from 3% to 6% of
gross rents received from the properties.
3. ASSET HELD FOR DISPOSITION:
During 1996, the Managing General Partner determined that, based on economic
conditions in the region where Old Mill Place Shopping Center ("Old Mill") is
located, it was in the best interest of the Partnership to sell Old Mill.
Accordingly, the Partnership is currently marketing Old Mill for sale and
expects the disposition to be final by late 1996 or early 1997. The carrying
basis, net of accumulated depreciation and amortization, of Old Mill on the
Partnership's Balance Sheet as of March 31, 1996 was $3,777,400, which does not
exceed the estimated fair value, less costs to sell. Net income for Old Mill,
included in the Partnership's Statements of Income and Expenses, for the
quarters ended March 31, 1996 and 1995 was $192,100 and $165,800, respectively.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the Partnership's annual report for the year ended
December 31, 1995, for a discussion of the Partnership's business.
As the Partnership progresses through the disposition phase of its life cycle,
management's discussion and analysis of financial condition and results of
operations is complicated with respect to comparisons between periods. Results
of net income and cash flows as defined by generally accepted accounting
principles ("GAAP") as well as Cash Flow (as defined in the Partnership
Agreement) are generally expected to decline as real property interests are
sold or disposed of since the Partnership no longer realizes the results
generated from such real property interests. Accordingly, rental income,
depreciation and amortization expense, property operating expenses, repairs and
maintenance expenses, real estate taxes and insurance are expected to decline,
but will continue to comprise significant components of net income and cash
flows as defined by GAAP as well as Cash Flow (as defined in the Partnership
Agreement) until the final property is sold. Also, during the disposition
phase, cash and cash equivalents increase as Sale and Refinancing Proceeds are
received and decrease as the Partnership utilizes these proceeds for the
purposes of distributions to Limited Partners, making capital improvements to
the Partnership's remaining properties or other working capital requirements.
Prior to being utilized for such purposes, these proceeds are invested in
short-term money market instruments. Sale and Refinancing Proceeds are excluded
from the determination of Cash Flow (as defined in the Partnership Agreement).
OPERATIONS
The table below is a recap of certain operating results of each of the
Partnership's remaining properties for the quarters ended March 31, 1996 and
1995. The discussion following the table should be read in conjunction with the
Financial Statements and Notes thereto appearing in this report.
<TABLE>
<CAPTION>
Comparative
Operating Results (a)
For the Quarters Ended
3/31/96 3/31/95
- ----------------------------------------------
<S> <C> <C>
BROOKWOOD METROPLEX OFFICE BUILDINGS I & II
Rental revenues $ 597,300 $ 564,500
- ----------------------------------------------
Property net income $ 175,800 $ 71,900
- ----------------------------------------------
Average occupancy 100% 100%
- ----------------------------------------------
OLD MILL PLACE SHOPPING CENTER
Rental revenues $ 301,300 $ 354,000
- ----------------------------------------------
Property net income $ 192,100 $ 165,800
- ----------------------------------------------
Average occupancy 85% 92%
- ----------------------------------------------
WALKER SPRINGS PLAZA SHOPPING CENTER
Rental revenues $ 274,800 $ 279,700
- ----------------------------------------------
Property net income $ 144,300 $ 157,300
- ----------------------------------------------
Average occupancy 100% 100%
- ----------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
TUCKERSTONE COMMONS/ROOKER ROYAL I
& II WAREHOUSES (B)
Rental revenues $ 200,200
- -----------------------------------
Property net income $ 77,100
- -----------------------------------
Average occupancy 98%
</TABLE>
- --------------------------------------------------------------------------------
(a) Excludes certain income and expense items which are either not directly
related to individual property operating results such as interest income on
short-term investments and the mortgage loan receivable and general and
administrative expenses or are related to properties disposed of by the
Partnership.
(b) Tuckerstone Commons/Rooker Royal I & II Warehouses ("Rooker") was sold on
June 16, 1995.
Net income for the quarter ended March 31, 1996 increased $30,700 when compared
to the quarter ended March 31, 1995. The increase was primarily due to improved
operating results of $103,900 and $26,300 at Brookwood Metroplex Office
Buildings I and II ("Brookwood") and Old Mill Place Shopping Center ("Old
Mill"), respectively. Partially offsetting the increase in net income was the
absence in 1996 of results of operations of $77,100 from Rooker and interest
income of $16,300 earned on the mortgage loan receivable. Diminished operating
results at Walker Springs Plaza Shopping Center ("Walker Springs") of $13,000
and increased general and administrative expenses of $6,700, as a result of
higher professional service fees, also partially offset the increase in net
income.
For purposes of the following comparative discussion, the operating results of
Rooker have been excluded.
Rental revenues decreased $24,800, or 2.1%, for the quarter ended March 31,
1996 when compared to the quarter ended March 31, 1995. The primary factor
which caused the decrease in rental revenues was a decrease in the quarterly
average occupancy rate at Old Mill. Partially offsetting the decrease in rental
revenues was an increase in the quarterly average effective rental rate at
Brookwood. Rental revenues at Walker Springs remained stable during the
quarters under comparison.
Depreciation and amortization expense decreased $147,500 for the quarters under
comparison. The decrease was primarily due to the fact that effective January
1, 1996, the Partnership ceased the periodic depreciation and amortization
expense for depreciable and amortizable assets at Old Mill in connection with
classifying the property as held for disposition. In addition, amortization
expense increased as a result of the write off in 1995 of the unamortized loan
acquisition costs on the mortgage loan collateralized by Brookwood.
Real estate tax expense increased $17,800 for the quarters under comparison.
The increase was primarily due to a refund received in 1995 of $17,700 for 1993
taxes at Walker Springs.
Property operating, insurance and repairs and maintenance expenses remained
stable for the quarters under comparison.
To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing General Partner, through its Affiliated asset and property
management groups, continues to take the following actions: 1) implementation
of marketing programs, including hiring of third-party leasing agents or
providing on-site leasing personnel, advertising, direct mail campaigns and
development of building brochures; 2) early renewal of existing tenant leases
and
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
addressing any expansion needs these tenants may have; 3) promotion of local
broker events and networking with local brokers; 4) networking with national
level retailers; 5) cold-calling other businesses and tenants in the market
area; and 6) providing rental concessions or competitively pricing rental rates
depending on market conditions.
LIQUIDITY AND CAPITAL RESOURCES
One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. In
the interim, the Partnership continues to manage and maintain its remaining
properties. Notwithstanding the Partnership's intention relative to property
sales, another primary objective of the Partnership is to provide cash
distributions to Partners from Partnership operations. To the extent cumulative
cash distributions exceed net income, such excess distributions are treated as
a return of capital. Cash Flow (as defined in the Partnership Agreement) is
generally not equal to Partnership net income or cash flows as defined by GAAP,
since certain items are treated differently under the Partnership Agreement
than under GAAP. Management believes that to facilitate a clear understanding
of the Partnership's operations, an analysis of Cash Flow (as defined in the
Partnership Agreement) should be examined in conjunction with an analysis of
net income or cash flows, as defined by GAAP. The following table includes a
reconciliation of Cash Flow (as defined in the Partnership Agreement) to cash
flows provided by operating activities as defined by GAAP. Such amounts are not
indicative of actual distributions to Partners and should not neccessarily be
considered as an alternative to the results disclosed in the Statements of
Income and Expenses and Statements of Cash Flows.
<TABLE>
<CAPTION>
Comparative
Cash Flow Results
For the Quarters
Ended
3/31/96 3/31/95
- ----------------------------------------------------------------------------
<S> <C> <C>
Cash Flow (as defined in the Partnership Agreement) $ 747,700 $ 916,300
Items of reconciliation:
Forgiveness of principal on mortgage loan receivable 20,000
(Increase) in current assets (96,800) (35,600)
(Decrease) increase in current liabilities (232,300) 164,100
- ----------------------------------------------------------------------------
Net cash provided by operating activities $ 418,600 $1,064,800
- ----------------------------------------------------------------------------
Net cash (used for) provided by investing activities $ (12,700) $1,033,600
- ----------------------------------------------------------------------------
Net cash (used for) financing activities $(843,600) $ (774,000)
- ----------------------------------------------------------------------------
</TABLE>
The decrease in Cash Flow (as defined in the Partnership Agreement) of $168,600
for the quarter ended March 31, 1996 when compared to quarter ended March 31,
1995 was primarily due to the absence of the operating results generated by
Rooker in 1995. In addition, the net changes in net income of the Partnership's
remaining properties, exclusive of depreciation and amortization expense, as
previously discussed, contributed to the decrease.
The decrease in the Partnership's cash position as of March 31, 1996 when
compared to December 31, 1995 was primarily due to the fact that the
distributions paid to Partners exceeded the net cash provided by operating
activities. The liquid assets of the Partnership as of March 31, 1996 are
comprised of undistributed Sale Proceeds and undistributed cash provided by
operating activities retained for working capital purposes.
Net cash provided by operating activities decreased $646,200 for the quarter
ended March 31, 1996 when compared to the quarter ended March 31, 1995. This
decrease was primarily due to the decrease in current liabilities at all of the
Partnership's remaining properties. Other factors which contributed to the
decrease in cash provided by operating activities were: 1) the absence of the
results generated by Rooker; 2) the net change in net income, exclusive of
depreciation and amortization expense, of the Partnership's remaining
properties and 3) an increase in tenant rental payments to be collected at Old
Mill.
Net cash provided by (used for) investing activities changed from $1,033,600
for the quarter ended March 31, 1995 to $(12,700) for the quarter ended March
31, 1996. This change was primarily due to the net proceeds received in
February 1995 on the retirement of the mortgage loan receivable. Payments for
capital and tenant improvements and leasing costs remained stable during the
quarters under comparison. The Partnership maintains working capital reserves
to pay for capital expenditures such as building and tenant improvements and
leasing costs. During the quarter ended March 31, 1996, the Partnership spent
$12,700 for capital and tenant improvements and leasing costs and has budgeted
to spend approximately $485,000 during the remainder of 1996. Of the remaining
budgeted amount, approximately $270,000, $175,000, and $40,000 relates to
anticipated capital, tenant improvement and leasing costs expected to be
incurred at Old Mill, Walker Springs and Brookwood, respectively. The Managing
General Partner believes these improvements and leasing costs are necessary in
order to increase and/or maintain occupancy levels in very competitive markets,
maximize rental rates charged to new and renewing tenants and to prepare the
remaining properties for eventual disposition.
The increase in net cash (used for) financing activities of $69,600 was
primarily due to an increase in the distributions paid to Partners in 1996 when
compared to 1995. Another contributing factor was a decrease in tenant security
deposits, primarily as a result of the sale of Rooker.
The Managing General Partner continues to take a conservative approach to
projections of future rental income in its determination of adequate levels of
cash reserves due to the anticipated capital, tenant improvement and leasing
costs necessary to be made at the Partnership's properties during the next
several years. For the quarter ended March 31, 1996, the Partnership included
$88,400 of previously undistributed Cash Flow (as defined in the Partnership
Agreement) in its first quarter distribution to Partners.
Distributions to Limited Partners for the quarter ended March 31, 1996 were
declared in the amount of $752,500, or $10.75 per Unit. Cash distributions are
made 60 days after the last day of each fiscal quarter. The amount of future
distributions to Partners will ultimately be dependent upon the performance of
the Partnership's investments as well as the Managing General Partner's
determination of the amount of cash necessary to supplement working capital
reserves to meet future liquidity requirements of the Partnership. Accordingly,
there can be no assurance as to the amount and/or availability of cash for
future distributions to Partners.
7
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K:
A report on Form 8-K dated April 1, 1996, was filed reporting the
change in the Partnership's certifying accountants.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES VIII
BY: FIRST CAPITAL FINANCIAL CORPORATION
MANAGING GENERAL PARTNER
Date: May 13, 1996 By: /s/ DOUGLAS CROCKER II
------------ --------------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: May 13, 1996 By: /s/ NORMAN M. FIELD
------------ --------------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 8,810,400
<SECURITIES> 0
<RECEIVABLES> 346,200
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,156,600
<PP&E> 35,623,500
<DEPRECIATION> 11,395,500
<TOTAL-ASSETS> 33,403,700
<CURRENT-LIABILITIES> 1,260,700
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 32,072,500
<TOTAL-LIABILITY-AND-EQUITY> 33,403,700
<SALES> 0
<TOTAL-REVENUES> 1,293,600
<CGS> 0
<TOTAL-COSTS> 486,700
<OTHER-EXPENSES> 59,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 569,600
<INCOME-TAX> 0
<INCOME-CONTINUING> 569,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 569,600
<EPS-PRIMARY> 6.94
<EPS-DILUTED> 6.94
</TABLE>
